By Teresa Rivas
Like other vacationers, timeshare owners are looking to get away from it all -- including the business' poor reputation. An industry revival is helping them do just that.
Count Carol Lilienfeld among the fans. After a 2018 operation, she got the best kind of prescription: Her doctor told her she had to take long weekends away to lower her stress. As a timeshare owner, she could follow that advice easily, without adding much to her budget.
Timeshares aren't perfect. Lilienfeld has sometimes run into hassles booking trips, and as an attorney, she's well aware that timeshares aren't good estate planning tools, as they're sometimes advertised. Yet she's still been an owner for about two decades. "For the most part, I've been happy with them," she says.
She isn't the only one. Some 10 million households own timeshares, and report a 90% satisfaction rate, according to the latest data from the trade group American Resort Development Association, known as ARDA. Average occupancy hit a postpandemic high of 80% in 2024, well ahead of the hotel occupancy rate in the mid-60% range, while rental revenue has ballooned by $1 billion since 2021, reaching a record $3.2 billion last year.
Just don't call them timeshares. Once tarred with the idea that these arrangements are unwise investment at best, and a scam at worst, vacation ownership, as it has been rebranded, counted $10.5 billion in property sales last year -- a near-record level and more than double the 2020 low of $4.9 billion. That growth reflects a sea change in how and where these accommodations are used -- and by whom -- and a potential boon for the stocks related to them.
"If you go back 30 or 40 years it had a pretty dicey reputation," says Truist analyst C. Patrick Scholes. "What happened especially for the publicly traded companies, was the Wall Street-ification of the timeshare business."
Scholes likens it to the transition the casino industry went through in the 1990s, when companies left behind their seedier roots and modernized their businesses to appeal to investors. "That doesn't mean it can't be an aggressively pushed product, but it's become more mainstream, and the industry has definitely cleaned itself up in the past 20 years," he says.
Part of that push happened because the world's biggest hospitality brands got involved. Although they are separate publicly traded companies, it's easy to see why Marriott International has a vested interest in making sure timeshare operator Marriott Vacations Worldwide has high standards and satisfaction rates. A similar story holds for Hilton Hotels and Hilton Grand Vacations. After a 2021 merger and rebrand, Travel + Leisure now owns Club Wyndham and WorldMark by Wyndham, which are connected to Wyndham Hotels & Resorts through Wyndham Rewards.
Today's guests are happier because they have more options. The old fixed-interval model required owners to visit the same location and stay in the same unit for the same dates every year, a Groundhog Day-style system that wasn't very popular. It now uses a much more flexible, points-based system that allows owners to visit properties worldwide, whenever they want, from Boston to Bali and Bhutan. "The industry has evolved and gotten more user friendly," says Deutsche Bank analyst Chris Woronka.
Moreover, as ARDA notes, some timeshare companies allow members to use their points -- the currency of the vacation ownership world, akin to airline miles -- for other accommodations, like traditional hotels and cruises, as well as activities like golf and spa trips.
The industry used to have a stodgy reputation, dating from its early days when it catered to oldsters, but that is not the reality today: The average age of a recent timeshare purchaser is 39, and the average age of all timeshare owners is 45.
Some of those may have inherited them from their parents, but Woronka says it's easy to see why millennials are seeking them out on their own: "The economics suggest that the sooner you buy a timeshare, the more utility it has. So if you think you'll be able to travel fairly regularly until you're 75 or 80 years old, you're better off buying in your 30s."
The companies themselves have an appealing business model. Annual fees include things like taxes, daily operations, regular property renovations -- and provide a steady recurring revenue stream. Regular payments that count toward ownership incentivizes travelers to prioritize staying with the brand when they travel, and to travel more frequently, given they have already prepaid for a good portion of the trip.
"Our owners are vacationing largely with dollars they spent five to 10 years ago," says Travel + Leisure Co. CEO Michael Brown. "So the question becomes not 'do I want to go,' but 'where do I want to travel.'"
The three publicly traded companies -- Marriott Vacations Worldwide, Hilton Grand Vacations, and Travel + Leisure -- have been on very different journeys in recent years. Marriott did well after its spinoff from Marriott International in 2011, but has lost half of its value in the past five years. Hilton has risen 50% over the same period, while Travel + Leisure has climbed 75%. The S&P 500 is up 86% over the same period.
"All three of these are in a very good space, trade below market multiples, and throw off a lot of free cash," says Woronka. Even with Marriott's recent troubles -- attributable to a number of likely temporary issues like acquisition integration hiccups and the need to upgrade properties -- the company is "still throwing off a couple hundred million in free cash flow this year."
Marriott is the hardest to love, but also the cheapest to buy. With the company's earnings per share expected to grow at 3.4% next year to $6.95, it trades at just eight times 2026 projected EPS. The company is in the hunt for a new chief executive officer, whose job it will be to boost the lowest gross margins of the group -- and that appointment could be a catalyst for the shares. Marriott is also actively buying back its stock, and sports a hefty 5.4% dividend yield.
Hilton changes hands for 11 times 2026 earnings, with gross margins above 50% in recent years, and is expected to see earnings jump 82%, to $4.14, after two years of lower earnings growth. It alone among the three doesn't pay a dividend but bought back $150 million of its shares in the most recent quarter.
Travel + Leisure recently hit record highs, but still trades at 10 times 2026 earnings, and has sustained gross margins in the mid-30% range. It, too, is an active share repurchaser and has a 3.1% dividend yield. In addition, it has a host of new specialty themed projects, including Margaritaville Vacation Club resorts, Sports Illustrated Resorts locations announced in Nashville and Chicago, and the launch of the Eddie Bauer Adventure Club partnership with Authentic Brands Group. "Consumers are increasingly prioritizing experiential travel and destination-based vacations they can engage with, which aligns well with our strategy," Brown told Barron's.
Scholes has Buy ratings on all three stocks. But he's not just a timeshare bull, he's also an owner. After years of dealing with the inconsistencies of Airbnb on his family vacations -- culminating in a malfunctioning bathroom on New Year's Eve at a rental whose property manager's phone went straight to voice mail -- he decided to take the plunge.
"I follow this space but I never thought about it until that moment," he says. Scholes doesn't treat it as an investment, but after doing the math it was clear a timeshare would be the most cost effective long-term option. "It turned out to be a great deal for me and I'm happy with it."
More and more travelers -- and investors -- agree.
Write to Teresa Rivas at teresa.rivas@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
December 23, 2025 03:00 ET (08:00 GMT)
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